Republican Budget Asks Federal Employees to Contribute More to Pensions

Pension reforms would save $125 billion over the next decade, says Rep. Paul Ryan, R-Wis. Pension reforms would save $125 billion over the next decade, says Rep. Paul Ryan, R-Wis. Eric Gay/AP

House Republicans again are calling for a smaller government workforce and less generous benefits for federal employees, as part of a plan to help reduce the overall budget deficit.

Rep. Paul Ryan, R-Wis., unveiled his fiscal 2015 budget blueprint Tuesday morning, which proposes increasing the amount feds contribute to their pensions and eliminating a special retirement supplement for certain employees who retire before the age of 62. The GOP proposal would require federal employees, lawmakers and congressional staff to contribute half to their pensions, with the government contributing the other 50 percent. Currently, the government contributes more than 50 percent to the pensions of employees enrolled in the Federal Employees Retirement System – which is most of the federal workforce.

Under the Ryan proposal, FERS enrollees would contribute 6.35 percent of their paycheck to their defined benefit. Right now there is a three-tiered contribution system under FERS: Federal employees hired before 2012 contribute 0.8 percent of each pay check to their pension; those hired in 2013 contribute 3.1 percent and those hired in 2014 contribute 4.4 percent.

The budget proposal also wants to get rid of the FERS Annuity Supplement, which benefits those government workers who retire before the age of 62 and who are not eligible for mandatory retirement. The supplement is intended to bridge the time between when they retire and when they receive Social Security benefits. The actual language in the document calls for “reform” to the special retirement benefit but Ryan has suggested eliminating it before. President Obama also has said he supports doing away with the FERS Annuity Supplement.

Also on the Republican chopping block: the student loan repayment benefit for federal employees. The GOP has recommended cutting this before.

Reforming the civil service pension system would save an estimated $125 billion over the next decade, claimed Ryan, who is chairman of the House Budget Committee. “This would achieve significant budgetary savings and also help facilitate a transition to a defined-contribution system for new federal employees that would give them more control over their own retirement security,” the budget document stated.

The GOP budget proposal, dubbed “The Path to Prosperity: Fiscal Year 2015 Budget Resolution,” also recommends reducing the government workforce by 10 percent through attrition by replacing one employee for every three who leave government service. The proposal would exempt national security jobs. Where the framework seeks to reduce benefits to civilian federal employees, it pledges to provide military service members with the “best equipment, training and compensation for their continued success.” It also carves out more money for veterans. “Veterans are, and will remain, the highest priority within this budget,” Ryan’s proposal stated. However the document expressed concern over the Veterans Affairs Department’s “elusive” success to date toward eliminating the disability claims backlog and veteran homelessness.

The Republican plan overall seeks to balance the budget in a decade and reduce spending by $5.1 trillion during that time through reforming the tax code and entitlement programs, and streamlining other government programs. Other priorities include repealing the 2010 Affordable Health Care Act, and eliminating waste governmentwide. “Federal pay, benefits and mismanagement of properties are just a few areas where savings should be achieved,” the blueprint stated.

The plan listed maintaining “robust compensation” for military service members as a priority, but also noted the “explosive” growth in Defense Department personnel costs since 2001. “In future years, serious consideration must be given to the [Military Compensation and Retirement Modernization] Commission’s recommendations if this defense program is going to be realized within existing budgets,” the document stated. The Republican plan also said that any troop reductions “should be accompanied by reductions in the civilian and contractor workforce, which has ballooned in recent years and is now approximately the same size as the active-duty military, a ratio that is out of balance.”

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